The southwestern Connecticut office market followed up a strong first quarter with a mixed bag of results during the second quarter, though northern Fairfield County showed some impressive results.

The overall vacancy rate dropped to 16.3 percent during the quarter, 0.2 percentage points lower than the rate recorded in the prior year and quarter, according to RHYS Commercial, a Stamford commercial real estate firm.

Across the submarkets, northern Fairfield County saw another strong quarter, with the vacancy level dropping by 0.6 percentage points over the quarter and 1.9 percentage points over the year to finish the quarter with a vacancy rate of 16.4 percent.

Southern Fairfield County had the highest vacancy rate across the county at 19.7 percent, slightly higher than the previous quarter but unchanged on a yearly basis.

The central submarket's vacancy rate also increased quarter to quarter, but dropped year-over-year to 14 percent.

Long-term optimism

The eastern submarket saw the strongest improvement in a quarterly basis, dropping by 1.2 percentage points to finish at 12 percent.

The improved levels in some areas gave Eric Griffin, director of research and financial analysis, reason for long-term optimism.

"Down the road, I think things are improving, and I think availability rates will be going down the rest of the year," Griffin said. "There are more potential tenants looking for space."

The availability rate typically represents space that will be available in a market within the next 12 months.

Available space within the northern submarket (Bethel, Brookfield, Danbury, Newtown and Ridgefield) saw the strongest quarterly and yearly improvement, with 2.4 percent less space available than the previous quarter and 7.8 percent less than the previous year, according to RHYS.

The average rental rate across the county was $34.16 in the quarter, 2.1 percent more than a year ago.

Activity at the Matrix

The Matrix, the office building and the former headquarters of Union Carbide, has seen an uptick in leasing in the first half of 2014, welcoming Mack Ro Mack into 12,500 square feet and the Eastern Collegiate Athletic Conference into 4,500 square feet.

"That's an awesome lease. It will be their new regional headquarters," said Aaron Smiles, director of operations for Matrix Realty Group, owner of the 1.3 million-square-foot complex off Old Ridgebury Road. "NewOak Capital, is expanding into a 9,000-square-foot space. There's more positive certainty about the economic climate and more deals as a result."

The asking rent at Matrix, which is 75 percent occupied, is $24.50 per square foot, plus electricity.

"Most of our deals are at full asking price," Smiles said. "We're not giving anything away. They like us because we have all the amenities and 22 conference centers."

The office market throughout the Danbury area is starting to pick up, added Jeff Ryer, principal in Ryer Associates, a Danbury commercial real estate brokerage.

"We're seeing more absorption. We're starting to fill stuff. We're not seeing contraction," he said, adding that most new tenants are small businesses from outside the area. "One guy we're working with now is with a company in Texas."

Defecting from Greenwich

Ryer said he recently has worked with individuals who left financial services firms in the Greenwich-Stamford area and have decided to open their own office in the region.

Based on his recent experience, he is optimistic about the prospects of the office market in the county.

"I've been pretty much bullish. Things are in a slight improvement," Ryer said.

Mick Consalvo, vice president of Tower Realty, a commercial real estate brokerage firm in Brookfield, had a more reserved view of the office marketplace in the region.

"Our office market has been very weak. You have some good activity at Lee Farm and Matrix," he said, adding that other smaller office properties have not been as fortunate.

Some businesses are taking advantage of building owners offering low rents and moving within the region, Consalvo said.

"I'm working with a start-up, but it's small -- 1,500 square feet," he said. "There's a great opportunity for tenants, and landlords are being aggressive."

Some businesses are seeing an opportunity to move up from "rough space" to Class A office space, according to Consalvo.

Landlords will not see a marked improvement in occupancy levels until companies require their employees to spend more time in the office, he said.

"There's so much telecommuting," Consalvo said. "We need some businesses saying that they want face time with their employees."